PHNOM PENH—Cambodia’s workers could face far tougher economic times ahead as the country’s garment factories—a major employer and exporter in this impoverished country—are forced to close in the face of a worldwide economic slump.
The garment industry accounts for some two-thirds of Cambodia's export revenues and employs nearly 360,000 people, mostly women making less than U.S. $100 a month.
Sok Thy, a garment worker in Cambodia’s capital Phnom Penh, said the Seng Yong garment factory where she works has been closed for 10 days, leaving her without money to pay for rent and her children’s schooling.
“If I am jobless I have nothing to depend on. My children are still small and I often fall sick. Sometimes I don’t have enough money for [rent] because my salary is only U.S. $50 a month. I still have to pay for my children’s schooling, utility bills, and other things,” she said.
“My house now is in disrepair. The roof is leaky. If it rains, we cannot sleep until the rain stops. I rent this house and the owners are also poor—they lease the house to earn money to repair it,” Sok Thy said.
Another garment worker, Noeun, said that since her factory’s closure she has been unable to find work and would likely have to return to her home village.
“I don’t know what to do because I used to have a job and a salary, and now that I am jobless I don’t have anything to feed my children. I plan to open an embroidering business myself, but I don’t have the skills to do so yet,” she said.
Lack of security
Other garment workers said they were also worried about their job security.
A worker at the Sinh Yong garment factory in Phnom Penh’s Dankao district said management has made increasing cuts to employee hours and compensation in an effort to stay afloat.
In December, the owner assigned workers rotating shifts and stopped offering overtime.
But in January employees were allowed to work only 10 days or fewer because of a lack of orders.
Sinh Yong’s management most recently reduced one week of its workers’ salaries by 50 percent to keep workers on until Feb. 10, when they said the factory would resume normal operations.
A woman in her 40s, who declined to be named but said she works at the Tak Fan factory in Phnom Penh’s Chak Angre Leu commune, said her workplace would close in the next two months.
Six months pregnant, she said she was worried about where she would get the money to pay for her medical services when she gives birth.
“I am concerned because I won’t have any money if the factory is closed. Sometimes I borrow money when I am sick and do not have money to pay my hospital expenses. I want to find work at a grocery store after the factory is closed,” she said.
A worker at Tak Fan who asked not to be named called on factory owners to provide severance pay for workers to start new businesses if they are laid off.
“We want [the government] to help workers so that if the factory is closed we won’t be left empty-handed,” the worker said.
Decline in growth
Secretary of State for the Ministry of Labor Um Mean said the downturn in the global economy is reducing demand in Cambodia’s major garment export markets, including the United States and European Union, as consumers spend less on clothing.
Um Mean said 73 factories in Phnom Penh were closed in 2008, putting 224,000 people out of work.
In 2007, Cambodia enjoyed exceptional economic growth on the back of a thriving garment industry.
But just one year later, more than 30 garment factories were closed, leaving thousands jobless. Five factories shut down in Jan. 2009 alone, according to leaders of garment worker unions.
President of the Free Trade Union of Workers of the Kingdom of Cambodia Chea Mony said the closures will continue.
“More [garment] factories will be closed,” he said.
President of the Cambodian Confederation of Trade Unions Chuon Momthol said two more large garment factories will close in March after January closures left 60,000 workers without jobs.
He confirmed that factories Wan Lida and Seng Yong, where Sok Thy is currently employed, “would also be closed in March.”
But Chuon Momthol called on trade unions and their workers to show solidarity in rescuing the garment industry and asked them not to hold demonstrations, disrupting production.
Debt cycle
Even with jobs, Cambodia’s garment workers often struggle to afford rice, and many say they don't know how to survive if their factories shut down.
“I cannot support myself alone these days. On payday I just have enough money to repay my debts, but then I have to borrow money again,” said one worker, who declined to be identified.
“When I get sick, I have to borrow money. The salary is not enough to support myself, so we have to borrow money at the end of each month. When we get paid, we spend all of our money repaying debts, and then borrow more.”
“That will be a serious problem [if the factory closes]. At my age, I don’t know where I could find another job,” the worker said.
Growth under strain
The International Monetary Fund has said Cambodia’s economic growth will be hard to maintain in the midst of the global slowdown.
“Cambodia’s exceptional growth performance…is coming under increasing strain from the global financial crisis and weakening external demand,” the report said, adding that the country’s economy is at risk due to its “narrow production base, concentration of exports by product and destination, and dependence on external inflows.”
The report went on to say that garment export growth has fallen due to weak retail sales in the U.S. and that jobs in the sector were also declining, down 6 percent in July 2008 from a year earlier.
“Near-term prospects for the sector are poor from both an output and employment perspective, because of demand concentration in the U.S. and competition abroad,” the report said.
Original reporting by Seang Sophorn and Ouk Savborey for RFA's Khmer service. Khmer service director: Sos Kem. Translated by Sothea Thai and Chhin Uon. Written for the Web in English by Joshua Lipes. Edited by Sarah Jackson-Han.